Unilever dips 6% as rising commodity prices cut into margin outlook

FILE PHOTO: Unilever headquarters in Rotterdam, Netherlands August 21, 2018. REUTERS/Piroschka van de Wouw
  • Unilever slid as much as 6% on Thursday after the company downgraded its margin outlook for the year.
  • The stock was Thursday’s biggest loser among the FTSE 100.
  • The outlook adjustment comes as Unilever finds itself caught in a brewing political row over a decision by Ben & Jerry’s, its subsidiary, to cease operations in what it called the occupied Palestinian territory.
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Unilever slid as much as 6% on Thursday after the company downgraded its margin outlook for the year.

On a Thursday earnings call, Unilever announced that despite healthy sales growth, rising commodities prices had begun to eat away at its operating margins. The company has raised prices but not quickly enough to prevent margins from compressing. Unilever downgraded its margins outlook to “about flat.”

The stock fell on the news, dropping sharply as British markets opened and trending down slowly thereafter. The stock was Thursday’s biggest loser among the FTSE 100.

The outlook adjustment comes as Unilever finds itself caught in a brewing political row over a decision by Ben & Jerry’s to cease operations in what it called the occupied Palestinian territory. Ben & Jerry’s is owned by Unilever but is run by an independent board, signaling a potential conflict over control of the company.

On Thursday, a Texas official said the state’s pension fund was exploring divesting from Unilever under a 2017 law banning investments in any company that boycotts Israel. Earlier on Tuesday, Israeli Prime Minister Naftali Bennett said his country would “act aggressively” against Ben & Jerry’s and warned of “severe consequences.”

“Unilever remains fully committed to our business in Israel,” Unilever CEO Alan Jope said during the Thursday earnings call.

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Elon Musk trumpeted self-driving cars, joked about vampires, and recalled a USB-cable hunt on Tesla’s earnings call. Here are the 11 best quotes.

elon musk
Elon Musk.

  • Elon Musk discussed AI, clean energy, and production headaches on Tesla’s earnings call.
  • The Tesla CEO also mentioned fossil-fuel taxes, vampires, and USB cables.
  • Scroll down for Musk’s 11 best quotes from the call.
  • See more stories on Insider’s business page.

Tesla CEO Elon Musk made several bold predictions, trumpeted the power of clean energy, and bemoaned the difficulty of mass production during the electric-vehicle company’s first-quarter earnings call on Monday.

The self-proclaimed “Technoking of Tesla” also touched on vampires, USB cables, self-driving cars, energy taxes, and World War II, according to a transcript on Sentieo, a financial-research site.

Here are Musk’s 11 best quotes, lightly edited and condensed for clarity:

1. “More likely than not, Model Y will be the best-selling car or truck of any kind in the world in 2022.”

2. “There’s no question in my mind that with a pure-vision solution, we can make a car that is dramatically safer than the average person.” – asserting that a self-driving car, guided by multiple cameras that process images at superhuman speed, will be safer than a human-controlled car.

3. “Long term, people will think of Tesla as much as an AI robotics company as we are a car company, or an energy company.”

4. “I just love that they call it vampires.” – commenting on “vampire drain,” the term for electric batteries losing charge when not in use.

5. “You can actually power the entire United States with roughly a 100-mile grid of solar. It’s entirely possible to power all of Earth with a small percentage of Earth’s area.”

6. “Why don’t we do it? The energy basis of the earth is gigantic, super-mega-insanely gigantic. So you can’t just go and do 1 zillion terawatts overnight. You’ve got to build the production capacity for the battery cells, for the solar cells. You’ve got to put that into vehicles. You’ve got to put that into storage packs. You’ve got to put that into solar panels and Solarglass Roofs, and you’ve got to deploy all this stuff.”

7. “We should tax energy that we think is probably bad and support energy we think is probably good, just like cigarettes and alcohol, versus fruits and vegetables.”

8. “Prototypes are trivial, they’re child’s play. Production at large scale with higher liability and low cost – insanely difficult. Myself and many others at Tesla had to basically have several aneurysms to get this done.”

9. “What Tesla achieved on the automotive side was not to create an electric car. The truly profound thing on the car side is that Tesla was the first American car company to achieve volume production of a car in 100 years and not go bankrupt.”

10. “We’ve had production stop because of carpet in the trunk. We’ve had production stop because of a USB cable. At one point, for Model S, we literally raided every electronics store in the Bay Area. For a few days there, nobody could buy a USB cable in the Bay Area because we went and bought them all to put them in the car.” – describing how a shortage of one minor component out of 10,000 can halt production entirely.

11. “We’re talking millions of cars, a massive global supply chain, 50 countries, dozens of regulatory regimes. Solving those constraints and logistical problems makes World War II look trivial. I’m not kidding.”

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